Perspectives from female founders

Experiences, challenges, and hopes of female founders in our portfolio

“We need to build the right pipeline and encourage women to participate and take risks.”

Dr. Kamakshi Sivaramakrishnan delivered the sale of her company, Drawbridge (acquired by LinkedIn), and her first child within the same week. “We had a seven-hour meeting with multiple execs and teams that needed to evaluate us. That was two days before I delivered my child,” she says. She recalls nursing her baby at diligence meetings.

Founding a startup is already incredibly difficult, and female founders face an uphill battle. Last year, venture capital funding for female-founded companies increased — but only to 2.7%, according to Pitchbook. To put this in perspective, Quibi (a recent high-profile startup that shut down six months after going live) raised more money than all other female founders raised this year combined. Unfortunately, VC investment in female-founded companies has dropped this year back to 2018 levels of 2.1%.

Yet the data is compelling: female-founded startups generate higher returns. First Round Capital found that women-founded companies it funded performed 63% better than all-male founding teams. Research from the Ewing Marion Kauffman Foundation found that women-led teams generate a 35% higher return on investment than all-male teams. And a BCG study of MassChallenge accelerator program participants found that for every dollar of investment, female-run startups generated 78 cents compared to only 31 cents for male-founded startups.

In our previous round at Tsingyuan Ventures, 18% of founders we invested in were female. But we’re not satisfied with this statistic: we’re actively working to find more female founders to fund, we’ve co-invested with all-female VC funds like SoGal Ventures, and we’ve attended and supported the Female Founders Summit organized by Qualcomm Ventures (our Sarah Daniels won the top honor last year). We’ve built our firm with a strong belief in data-driven decision-making, and had great success investing in undervalued groups (in our case, Chinese PhDs in the US). Investing in female founders is an extension of this same philosophy.

In our interview series with 23 founders and venture partners, 8 of our interviewees were female. They offered some perspectives on the challenges of being a female founder and suggestions for VCs to be more inclusive.

Challenges

Access

“The number of female founders is very small. Part of it is networking access and connections and being able to reach investors. […] I feel privileged coming from Stanford and being able to get in the door, but I’ve talked to women who can’t get that first meeting,” says Dr. Maryam Ziaei, CEO of iSono Health. Having connections and referrals can make a big difference; several founders we interviewed said that they found investors and partners through their networks.

I’ve talked to women who can’t get that first meeting

Another consequence of less access to networks is a scarcity of female founder role models. Phoebe Yao, CEO of Pareto, says that she initially was “lacking the confidence. I knew I wanted to be working on Pareto for many, many years to come. But I didn’t have the guts to believe in myself and what I could accomplish. I’m a solo female founder, and you don’t see many role models.” Phoebe states that she still sometimes faces self-doubt.

Dr. Kamakshi Sivaramakrishnan says: “There aren’t many women in technology enterprise entrepreneurial careers. You feel discomfort when you don’t see many people like you.”

Perceptions

“I’ve been told by some investors that when I pitch, I don’t sound like someone “typical of Silicon Valley.” I’m not as brash and I don’t say things quite as aggressively. But a higher percentage of my projections tend to come true. It just looks and sounds different,” says Sarah Daniels, CEO of Blue Canoe Learning. “I think that’s true for women and also for other minority and underrepresented groups. As a society, we have to become more open-minded about different paths and what leadership and success can look like.”

Perceptions of female founders can range from negative stereotypes to higher expectations from investors. “There’s just more scrutiny. Women founders are given less benefit of the doubt, especially if you’re younger and don’t have 20–30 years of experience in your field. You have to be super prepared and know your numbers really well,” says Dr. Maryam Ziaei.

There’s just more scrutiny. Women founders are given less benefit of the doubt, especially if you’re younger

Even after investment, perceptions of female CEOs can still have negative consequences. Dr. Pamela Contag, CEO of BioEclipse Therapeutics, says that in her second company she wanted to build a biorefinery. But her board felt that “a woman should not want to ‘put steel in the ground.’ […] I always look back and think, should I have fought harder for my vision? Should I have fought harder?” she says.

In fact, even the constant focus on the gender of a founder can be a double standard. “I am asked about being a female co-founder often. Sometimes I think to myself, why do people keep asking me this question? There have been interviews where my colleagues were being asked all types of questions about being a founder and their technical expertise, but when the interviewer got to me the question was: how does it feel to be a woman?” says Dr. Kiana Aran.

Why do people keep asking me this question?

Personal life and family

Personal life is closely tied to negative perceptions and stereotypes. “There are some expectations that you’ll have to balance family and children. Investors sometimes look at that as a negative, because they think you won’t be able to dedicate yourselves to the startup as much. Usually men aren’t asked questions about if they have children,” says Dr. Maryam Ziaei.

“I recognize that as women we are often told we must choose between our personal and professional lives,” says Dr. Kiana Aran. But she tries to encourage her female mentees to “throw this idea out the window. You should not have to separate your personal goals from your professional goals. My advice to young women would be to try to merge your personal and professional passions.” Women are often able to merge these passions, but still face barriers from the industry.

I recognize that as women we are often told we must choose between our personal and professional lives

Possible Paths Forward

Eliminating the unfairness in investment decisions is a complex problem across the industry. But it’s important to design solutions with female founders and take into account their perspectives. Here are some of their ideas and hopes for encouraging more women to start a company.

Increase access to opportunities

Dr. Kamakshi Sivaramakrishnan advocates for creating a more friendly environment for girls in high school and college to become part of STEM disciplines, entrepreneurship, and VC. She also points to mentorship as an impactful tool for fostering more female founders: “With venture capital, it’s about giving more women a chance at entrepreneurship and building a company. This is also where men can be a part of the process. In my life, people have made a difference by investing in me, by giving me a chance, and by mentoring me. Many of them have been men,” she says.

In my life, people have made a difference by investing in me, by giving me a chance, and by mentoring me

“Entrepreneurship by definition has risks. Going in, you have to be very comfortable with the fact that it’s unlikely to succeed. You’re giving a lot of time and energy in the early days of building a company,” she continues. “We need to build the right pipeline and encourage women to participate and take risks.”

Sarah Daniels adds that female VCs and role models can also boost opportunities for women: “We’re beginning to get more female VCs, which I think will lead to more investments in women CEOs. Having role models of successful women CEOs will help others have optimism that they can make the gauntlet. Personally, I’ve been lucky. But I also have chosen to work with folks who are open-minded and are looking at the numbers and facts.”

Having role models of successful women CEOs will help others have optimism that they can make the gauntlet.

Shift attitudes about female leaders

“Diversity and inclusion goals start with opportunity and attitude. We need to be open-minded about what success looks like,” says Sarah Daniels. She emphasizes open-mindedness as an important attitude shift which can counter stereotypes about female leaders (including about personal life and family). “As a society, we have to become more open-minded about different paths and what leadership and success can look like.”

“I hope that instead of asking questions about challenges women face in male-dominated fields, people ask: how can you motivate more women to join this field and to become leaders?” says Dr. Kiana Aran. “If we really want to see change in society, we must support each other and lift each other up. […] You should not have to separate your personal goals from your professional goals.”

How can you motivate more women to join this field and to become leaders?

She asserts that focusing on solutions is most important. “My advice for women leaders is to focus on the opportunities in front of them, rather than focusing on the challenges we face. Be resilient and be focused on moving forward.”

My advice for women leaders is to focus on the opportunities in front of them, rather than focusing on the challenges we face.

Create more friendly environments

“Social structures and expectations to take care of family or children mean that women tend to opt out of [the entrepreneurship] process. We have to create more friendly environments where women are able to make decisions and invest in themselves. Not at the cost of family, but with a balance that is workable,” says Dr. Kamakshi Sivaramakrishnan.

“From an industry perspective, it’s also about a friendly environment where it’s okay to participate and it’s okay to fail. If your pitch doesn’t succeed, you can fix it and come back next time,” she says.

From an industry perspective, it’s also about a friendly environment where it’s okay to participate and it’s okay to fail

While delivering her baby and working on the Drawbridge sale, Dr. Sivaramakrishnan credits the support she got from her family and team, who created an environment where she could take risks. “No one is looking for sympathy. But we’re looking for a shot at building a startup,” she says.

Where do we go from here?

This is a long effort for the industry as a whole, but it is quite possible for us — as a small firm — to make a small contribution.

Some actions that we can take:

• Bring female partners along for our journey: at the partner level, we are mostly male. We need to make a concerted effort to change our own partner composition
• Apply the “Rooney Rule” to female-led start-ups: in the NFL, one of the tools employed to improve diversity in the coaching ranks is the “Rooney Rule” — for every head coaching vacancy, the team had to interview at least one Black candidate. They didn’t have to hire, but they had to seriously consider. This has had a positive impact, as many qualified candidates got in the door, and once in, many have excelled. We do something similar at Tsingyuan: as a VC firm, we are constantly making snap decisions on deals — we are willing to come to quick conclusions and move on. However, in cases where the company is founded by “our kind of entrepreneur” (ie., a PhD with the ability to execute on both sides of the Pacific), we will always take our time and seriously consider the company. The same standard can be applied to female entrepreneurs — “no snap rejects.”
• Form stronger partnerships with VC firms focused on female entrepreneurs: we have a lot to learn from firms that are paving the way. We should put our shoulders against their wheel.

Let us know your thoughts. Even better: if you’re a female founder (or know a great female founder), drop us a line!

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Tsingyuan Ventures is a $100M seed-stage technology firm. We back technical founders across software, life sciences, and frontier technologies. Learn more about our origin story and our approach here.

We’re always looking for great entrepreneurs and early stage ideas, and we’re always interested in having a discussion about venture, technology, and anything related. To see more about Tsingyuan Ventures, please visit our website: tsingyuan.ventures.